New Finance Bank touts its lending rates

New Finance Bank (NFB), a new entrant in the country’s banking sector, says it is currently offering competitive prices for its products, citing low lending rates and higher deposit rates on customer savings.

The bank’s deputy chief executive officer Gilford Kadzakumanja told Business News in Lilongwe last week that NFB, which opened its first branch in Lilongwe on  January 16 this year, will not “overburden” customers but rather offer what he said is a win-win situation.

“In terms of pricing, we are quite flexible. We are pricing our money in such a way that it benefits both the depositor and ourselves as a bank, but at the same time we are making sure that on our lending side, we do not overburden our customers by putting a high mark up above the base lending rate,” he said.

Currently, the base lending rate as set by Reserve Bank of Malawi (RBM) is at 25 percent but most commercial banks are charging interest rates of as high as 40 percent.

At such rates, most local companies led by the Malawi Confederation of Chambers of Commerce and Industry (MCCCI), have complained that it is difficult for companies to expand their businesses.

Last week, Minister of Industry and Trade Joseph Mwanamvekha said interest rates are currently “too high” and prohibitive to private sector growth and investment.

But Kadzakumanja said at 37 percent, their lending rate is competitive and added that the bank is offering deposit rates to some customers as high as 18 percent when most banks are offering as low as eight percent.

“Most deposit rates on that market are basically around eight percent or 10 percent for savings accounts and fixed accounts deposit rates are going up to 13 percent but we have gone ahead to offer as high as 18 percent for some of our selected customers because we believe customers deserve a good return from their money,” he said.

Kadzakumanja said the bank’s strategy is to deal with all types of customer segments from low-income earners to large corporate entities.

He said apart from the normal bank businesses of lending, NFB has gone a step further to help improve the well-being of its customers.